This document discusses reference groups and their influence on consumer decision making. It begins by defining reference groups and how they derive power through word of mouth communication. It then outlines the main types of reference groups and factors that impact their influence. Finally, it explores the concepts of word of mouth, opinion leadership, and how marketers leverage influential consumers to spread positive messages about brands.

1. Reference and social groups
Module -6

2. LEARNING OBJECTIVES
• Identify the types of reference groups that impact consumer
decision making.
• Know the factors impacting reference group influence.
LEARNING OBJECTIVES

3. LEARNING OBJECTIVES
• Become familiar with the concepts of word of mouth and opinion
leadership.
• Analyze how marketers leverage word of mouth and opinion leadership
as part of the marketing mix.
LEARNING OBJECTIVES

4. CHAPTER 8
INTRODUCTION

5. REFERENCE GROUPS
Reference groups serve as sources of comparison, influence and norms
for consumers’ opinions, values and behaviors.
Where do reference groups get their power and influence?
From each of us because consumers within any setting are strongly
influenced by what people think and how they behave.

6. INTRODUCTION
WORD OF MOUTH
Reference groups achieve their power through word of mouth (WOM).
Marketers strive to prompt the spread of positive WOM whereby
satisfied customers share their stories about how much they like
a business, product, service or event.

7. INTRODUCTION
WORD OF MOUTH
Because WOM typically comes from sources who have nothing
to gain by promoting brands’ products and services, it is seen as
the “best advertising.”

8. LEARNING OBJECTIVE 1
TYPES OF REFERENCE
GROUPS

9. TYPES OF REFERENCE GROUPS
MEMBERSHIP GROUPS
A group that you belong to, like a school club
• There are both primary and secondary membership groups.

10. TYPES OF REFERENCE GROUPS
MEMBERSHIP GROUPS
Primary: members have frequent interactions and often share their
thoughts and feelings; opinions of members truly matter to other
members
Secondary: consumers have less frequent interactions

11. TYPES OF REFERENCE GROUPS
ASPIRATIONAL GROUPS
A group that a consumer would like to be part of but to which she or he
does not currently or may never belong
There are two types of aspirational reference groups:
• Anticipatory
• Symbolic

12. TYPES OF REFERENCE GROUPS
ASPIRATIONAL GROUPS
Anticipatory: groups that consumers plan to join and that they
have a decent chance of joining due to direct contact with the group
Symbolic: groups that an individual is unlikely to belong despite
the fact that they may accept and strongly believe in the group’s
attitudes or closely held beliefs

13. TYPES OF REFERENCE GROUPS
DISSOCIATIVE GROUPS
A group that individuals avoid or deny connections with

14. TYPES OF REFERENCE GROUPS
FORMAL VS. INFORMAL REFERENCE GROUPS
Formal: often specific membership requirements
Informal: has no special membership or attendance requirements
other than common interests

15. LEARNING OBJECTIVE 2
FACTORS IMPACTING
REFERENCE GROUP
INFLUENCE

16. FACTORS IMPACTING REFERENCE GROUP INFLUENCE
FACTORS
The degree of influence that a reference group exerts on an individual’s
behavior depends on a number of factors:
• Conformity • Product conspicuousness
• The group’s power and expertise • Personality characteristics
• Relevant information and expertise

17. LEARNING OBJECTIVE 3
WORD OF MOUTH AND
OPINION LEADERSHIP

18. WOM AND OPINION LEADERSHIP
OPINION LEADERSHIP
The communications pertaining to consumer behavior between peers
are part of a process called “opinion leadership.”
Opinion leadership is defined as the process by which an influencer,
or an opinion leader, influences his or her peers, who are often referred
to as opinion receivers.

19. WOM AND OPINION LEADERSHIP
OPINION LEADERS / WOM
Opinion leaders tend to be influencers in specific product categories who
can provide credible advice through WOM.
Opinion leadership and influencer marketing is rapidly becoming
a critical tactic for marketers across a variety of industries.
Opinion leaders can also be opinion seekers.

20. WOM AND OPINION LEADERSHIP
CHARACTERISTICS OF OPINION LEADERS
Studies indicate that opinion leaders share the following characteristics:
• Highly knowledgeable of product category, actively follow innovation
• Self-confident, outgoing and sociable, ready for product discussions
• Avid readers of special-interest publications, regularly peruse websites

21. LEARNING OBJECTIVE 4
LEVERAGING WORD
OF MOUTH AND OPINION
LEADERSHIP

22. LEVERAGING WOM AND OPINION LEADERSHIP
LEVERAGING INFLUENCE
Marketers leverage WOM and opinion leadership as part
of the marketing mix.
Channels for driving positive brand awareness, consideration
and purchase include 1) social networks 2) user-generated content
and 3) consumer testimonials